Only 13 percent of consumers sought out-of-pocket cost information, according to a recent study.
For years, price transparency tools have been available from employers and health plans, as well as through public initiatives. Yet only a small percentage of consumers use these tools. A Health Affairs study found that 13% of consumers sought information on out-of-pocket costs and just 3% compared provider costs before receiving care.
Why is utilization so low? The lack of consumer incentives to use the tools is the primary reason, says Sally Rodriguez, chief of staff and director of products at the Health Care Cost Institute, Washington, D.C., a not-for-profit research institute that tracks healthcare spending.
“The insured consumer has no incentive to use many transparency tools. They may be saving money for their health plans, but that money doesn’t transfer to them,” Rodriguez says. When shopping for healthcare, consumers tend to be focused on factors like quality or location. “Other factors are more important than cost because they are not going to feel an impact if they choose a lower-cost provider.”
To spur consumer interest in using these tools, some health plans are experimenting with financial incentives that reward members if they choose lower-cost providers, Rodriguez says. For example, Blue Cross and Blue Shield of North Carolina, Durham, N.C., is offering financial rewards ranging from $50 to $500 to members who choose lower-cost, in-network providers. The rewards are available for approximately 100 eligible procedures.
Getting the word out
Another reason consumers may be slow to use price transparency tools is that they don’t know they exist, Rodriguez says. She recommends building awareness by increasing promotion of these resources. “[Consumers] need healthcare information that is relevant to their lives, and if plans are making cost a bigger part of their outreach, that could help,” she says.
Rodriguez also believes that making price transparency tools more relevant would likely lead to widespread adoption. For example, some early tools did not account for members’ health plans but offered average procedure costs. Today, more sophisticated tools allow users to understand what they are likely to pay based on their benefits.
Price transparency tools also could be made more relevant by including quality data, allowing users to make the most informed healthcare decisions. “The best tools incorporate quality information so people are getting a holistic picture of their options, rather than just being told which one costs more or less,” she says.
Aligning the stakeholders
Looking ahead, Rodriguez says, “There is momentum, but the stakeholders need to be aligned to create strong tools and incentives for people to use price transparency to lower healthcare costs.” Among these stakeholders are providers, health plans, policy makers and patients.
Rodriguez believes providers, in particular, will face greater demands to improve price transparency and offer cost estimates. For example, the Centers for Medicare & Medicaid Services issued a rule earlier this year requiring hospitals to make standard charges available to the public.
But when it comes to shifting consumer behavior, the most important factor may be creating better incentives, Rodriguez says. “The consumer has to be empowered and have a reason to care about this,” she says.
Interviewed for this article:
Sally Rodriguez, MPH, is chief of staff and director of products at the Health Care Cost Institute, Washington, D.C.